Los Angeles Times - 18 Oct 02

For Enron's Belden, 'Success Bred Power'

By Nancy Rivera Brooks and Nancy Vogel
October 18, 2002

When Timothy N. Belden got out of college around
1990, he found himself entering an arena that couldn't have been
sleepier.

He joined Lawrence Berkeley National Laboratory, a
research operation backed by the Energy Department, where he was a
utility policy analyst who wrote detailed studies on the most arcane
subjects. Among the many reports he co-authored was the abstruse "Theory
and Practice of Decoupling."

A decade or so later, however, Belden found himself
in a very different world as head of Western electricity trading for
Enron Corp.

The Houston-based company was then the biggest and
most aggressive player in a field that had become incredibly fast-paced
and high-stakes in the wake of the deregulation of energy markets in
California and elsewhere.

Along the way, Belden had evolved from an
idealistic, environmentally conscious policy wonk to the quintessential
Enron company man: smart, innovative and aggressive.

On Thursday, the 35-year-old Belden paid the price
for going too far with that aggressiveness. He pleaded guilty to a
single count of conspiracy to commit wire fraud in connection with
illicit trading tactics during California's 2000-01 energy crisis.

"I did it because I was trying to maximize profit
for Enron," Belden told a federal judge in San Francisco. He agreed to
cooperate in the continuing investigation and pay back $2.1 million in
ill-gotten gains.

Those who've known Belden for a long time were left
trying to make sense of how a person they considered supremely
trustworthy had gotten caught up in a huge corporate scandal.

"He's the most decent person I know in the whole
energy industry -- bar none," said Steve Stoft, an energy consultant who
hired Belden at the Lawrence Berkeley lab.

Stoft fondly remembered his friend's passion for the
environment, noting how Belden had once bought into a windmill company
"because he wanted to invest in alternative energy."

But as the years passed, and Belden abandoned his
life as a researcher to go to Portland General Electric Co. and then
Enron, he seemed to become interested in a different sort of power: his
own.

One energy consultant who worked with Enron in its
glory days remembers Belden as "sufficiently smart and sufficiently
intimidating to call his own shots. In that culture, success bred
power."

At Enron, Belden was at the nerve center of a vast
operation that bought and sold electricity around the clock. About 100
traders worked in constant activity under Belden on the high-tech
trading floor that Enron occupied in the World Trade Center in Portland,
Ore.

Deal after deal was lined up for the next month,
week, day -- or even minute -- with the Golden State's official markets,
the California Power Exchange and California Independent System
Operator, or with traders from the dozens of other energy companies
operating in the West.

Belden and his lieutenants -- some of whom now are
scrambling to cut their own plea agreements with prosecutors -- were
particularly talented at playing one market off another or at wringing
payments out of Cal-ISO to relieve congestion on the transmission grid,
internal Enron memos show. Frequently, Enron's traders created the
electron traffic jams they were then paid to fix, the documents
indicate.

This year, a state Senate committee investigating
alleged energy market manipulation by Enron and other companies received
five compact discs containing Belden's e-mails.

In one e-mail on May 12, 2000, just 10 days before
electricity prices first spiked, Belden sent a tantalizing message to
another Enron executive in Houston: